ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -a new worker hired adds more to total output than the previous worker hired, so that both average and marginal products are rising. costs that do not change as a firm’s output expands or contracts, often called overhead. the change in total costs arising from the production of additional units of output.

Detailed explanation-2: -Increasing marginal returns occur when a new worker adds more to total output than the previous new worker, so that both average and marginal products are rising.

Detailed explanation-3: -The change in output from adding one more worker is the marginal product of labor. At the beginning, adding each worker will result in increasing marginal returns. Workers will be able to specialize and gain skills. At some point, adding each worker will result in diminishing marginal returns.

Detailed explanation-4: -An increasing returns to scale occurs when the output increases by a larger proportion than the increase in inputs during the production process. For example, if input is increased by 3 times, but output increases by 3.75 times, then the firm or economy has experienced an increasing returns to scale.

Detailed explanation-5: -Stage I of the production function is the phase in which the marginal product of each additional worker increases. This happens because as more workers are added, they can cooperate with each other or specialize in certain operations to make better use of their equipment.